Markets continue to trade firm amid buying in Oil and Gas, Banking stocks

Indian equity benchmarks continued to trade firm in the afternoon session as buying momentum in the equities persisted, however a marginal downfall from day's high levels was seen as selling appeared in capital goods and IT stocks. Though most of the sectoral indices were trading in green with Oil and Gas as the top gaining index on BSE up by around 1.07% followed by FMCG and banking indices both trading up by over 0.50%. Buying was broad based with both mid cap and small cap indices were trading up by over 1.00%. Sentiments got a boost after PHD Chamber of Commerce and Industry has stated that the revival of southwest monsoon has widened India's growth prospects with GDP expected at around 5.9 percent for the current financial year. Oil and gas stocks were on buyer's radar after Reliance Industries reported encouraging earnings. Buying was also witnessed in public sector stocks as Finance Minister Arun Jaitley has stated that the recapitalisation to the tune of Rs 2.4 lakh crore in public sector banks to meet Basel III norms is a high priority item for the government. 

Force Motors has rallied 11% to Rs 596, extending its past three days rally, on back of heavy volumes. Astral Poly Technik was trading 3% higher at Rs 674 after reporting a strong 72% year on year (yoy) growth in standalone net profit at Rs 20.45 crore for Q1 FY15. However, Hindalco was down by around 1% to Rs 181 as company has decided to raise up to Rs 50 billion ($829.5 million) by selling shares to institutions or through other options.

On global front, Asian equity indices were trading mixed with Jakarta Stock Index up by 0.65% and Hang Seng down by 0.11%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,650 and 25,500 levels respectively. The market breadth on BSE was negative, out of 2,542 stocks traded, 1,622 stocks advanced, while 817 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,759.28 up by 117.72 points or 0.46% after trading in a range of 25,861.15 and 25,733.12. There were 19 stocks advancing against 11 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.10%, while Small cap index up by 1.19%.

The gaining sectoral indices on the BSE were Oil and Gas up by 1.07%, FMCG up by 0.76%, Bankex up by 0.58%, Consumer Durables up by 0.51% and Healthcare up by 0.50%. On the flip side, Capital Goods down by 0.19% and IT down by 0.14% were the losing indices on BSE.   

The top gainers on the Sensex were RIL up by 2.63%, HDFC up by 1.77%, Maruti Suzuki up by 1.56%, HUL up by 0.97% and Dr Reddy’s Lab up by 0.94%. On the flip side, Hindalco Inds down by 1.71%, Gail India down by 1.13%, Infosys down by 1.06%, Tata Motors down by 0.66% and L&T down by 0.59% were the top losers on the BSE.

Meanwhile, Finance Minister Arun Jaitley has stated that the recapitalisation to the tune of Rs 2.4 lakh crore in public sector banks to meet Basel III norms is a high priority item for the government. Finance Minister added that the government will make a plan for recapitalising of public sector banks over the next four years and capital would be raised by the banks without diluting the government stake below 51 percent.

Earlier in March 2014, the Reserve Bank of India (RBI) had extended deadline for banks to implement global capital norms, Basel III, by a year to March 2019 amid concerns over the asset quality and profitability of the banks. Indian banks will now align full implementation of Basel III norms closer to the internationally agreed date of January 1, 2019. However, the central bank issued more strict norms for Indian banks as compared to Basel Committee on Banking Supervision (BCBS). Under Basel III, total capital (Tier 1 and Tier 2) of a bank in India must be at least 9 per cent of risk weighted assets (RWAs) while, the BCBS requirement is minimum 8 per cent of RWAs.

However, to be in line with Basel-III norms, there is a requirement to infuse Rs 2,40,000 crore as equity in India’s public sector banks. Finance Minister Arun Jaitley said that the capital of these banks will be raised by increasing the public shareholdings in a phased manner through sale of shares largely via retail to common citizens of this country. Citizens of India will get direct shareholding in these banks, which currently they hold indirectly.

The CNX Nifty is currently trading at 7,699 up by 35.10 points or 0.46% after trading in a range of 7,722.10 and 7,687.10. There were 33 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were Reliance up by 2.70%, Kotak Bank up by 1.93%, ACC up by 1.67%, HDFC up by 1.61% and Maruti up by 1.60%. On the flip side, Hindalco down by 1.63%, Ultra Tech Cement down by 1.21%, Gail down by 1.11%, Infosys down by 1.07% and DLF down by 1.02% were the major losers on the index.

Asian equity indices were trading mixed;  Straits Times up by 0.11% to 3,314.03, Taiwan Weighted up by 0.43% to 9,440.97 and Jakarta Stock Index up by 0.65% to 5,120.13. While, Hang Seng down by 0.11% to 23,428.35 and Shanghai Composite down by 0.19% to 2,055.15.